Monday, December 27, 2010

Why the chase for the ghost of the past?

In our previous posting here, we presented MAS account from financial year 1993 to 2001 to show there is something sinister about the claim and demand to investigate MAS and Tan Sri Tajuddin Ramli.

The mere mention of Tajuddin does not attract complimentary and supportive comments, be it on ABITW or Rocky Bru's posting here that gave us a link. Some friends and political friends are whispering why this blog sounded supportive of Tajuddin, someone scorned by many.

We'll explain but we should ask why are many chasing the ghost of the past when there are bigger ghost of today?

First and foremost, supportive should not be the word but curiousity is more appropriate.

Secondly, it is nothing new for this blog to write about MAS. This blog has been tracking MAS issues until the time Dato Idris Jala left. We have written more than 30 postings on MAS and more when it include Air Asia.

This blog held back comment on the new management to give them time to establish themselves.

Thirdly, we sense a major bull in the stories on MAS by Raja Petra and Din Merican. No, it is not about a bullish stock market.

The story of MAS presented by Raja Petra and Din Merican have been made up and patched together with few unrelated stories to dramatise their politically motivated campaign to ridicule and smear national institutions like the police, MACC, Attorney General office, etc.

Fourth, we sense there is a sinister collaboration that could involve Tan Sri Nor Mohaamd Yakcop and Dato Kalimullah Masyerullah. Both are suspiciously linked to Anwar Ibrahim.

All one need is to go back to an 8-year old news article retrieved from Malaysia Today. It is a New York Times dated December 27, 2002 written by Wayne Arnold, Read below:

First he lost control of Malaysia's national airline, then one of its biggest cellular operators. Now Tajudin Ramli, the tycoon whose corporate empire has been besieged by the very government that helped him build it, appears to have lost control of his flagship holding company, too.

Malaysia's bad-debt agency, Pengurusan Danaharta, appointed special administrators earlier this week to take over day-to-day operations at Mr. Tajudin's aviation holding company, Naluri. The move came after the agency scrapped a 510.9 million ringgit ($134 million) deal to sell Mr. Tajudin's 45 percent stake in Naluri to recover some of the roughly 1 billion ringgit he owes Danaharta.

"We have to make sure that our rights are protected," said Izhar Hifnei Ismail, an agency spokesman. "What we really want to see is that whatever value there is preserved."

Seizing control of Naluri also gives the agency control of roughly 900 million ringgit ($236 million) left over from the government's much criticized, 1.8 billion ringgit buyout in late 2000 of Mr. Tajudin's stake in the Malaysian Airline System, the flag carrier. Naluri's new administrators will now be able to open Naluri's books, repeating a process that has already produced charges of financial misconduct against Mr. Tajudin at the two other companies he used to run.

The unraveling of Mr. Tajudin's holdings and the surrounding scandal are part of a purge by Prime Minister Mahathir Mohamad of the entrepreneurs he once relied on as nation builders. In their place, he has promoted a group of technocrats, like those who run Danaharta, to overhaul corporate Malaysia.

While it no longer has a business of its own, Naluri owns stakes in four small airlines, including World Airways in the United States. It also owns part of a Malaysian aircraft parts company with Boeing. Executives at Naluri said they were prohibited from commenting by the special administrators. Mr. Tajudin was unavailable, they said.

A former merchant banker, Mr. Tajudin rose to prominence in the late 1980's under Daim Zainuddin, then the finance minister. Mr. Tajudin's company, Technology Resources Industries, bought Naluri, then called Malaysian Helicopter Services, from the struggling Malaysian Airline System in 1991. The same year, Technology Resources bought the country's sole cellular operator, Celcom.

Mr. Tajudin capped the rapid expansion of Malaysian Helicopter in 1994 by turning around and paying 1.79 billion ringgit in cash for the central bank's controlling stake in Malaysian Airline System, financing the purchase with a huge loan backed by his own shareholdings.

Mr. Tajudin's borrowing caught up with him, however, when the Asian financial crisis hit Malaysia in 1997. While Technology Resources and Celcom managed to win restructuring deals with creditors, Mr. Tajudin tried in vain to sell his stake in Malaysian Airline to pay off debts.

In late 2000, the government -- with Mr. Daim doing a reprise as finance minister -- finally bought out Mr. Tajudin, paying Naluri the same price per share it had paid for Malaysian Airline seven years earlier. The bailout, which paid Mr. Tajudin more than twice the prevailing market price, provoked widespread public outrage and was followed by the ouster of Mr. Daim.

Since then, the airline's new managers have asked the police to investigate allegations of irregularities involving a contract with a Naluri cargo venture in Germany.

The new owner of Technology Resources has made similar accusations. Mr. Tajudin lost control of the company last spring when he failed to make payments on roughly 1 billion ringgit in personal loans backed by his stakes in Technology Resources and Naluri. Securities regulators refused to let him use the funds raised by the sale of his Malaysian Airline stake, much of which is still at Naluri. Danaharta, which had bought the loans from local banks, in turn sold his stake in Technology Resources to Telekom Malaysia.

This summer, Danaharta agreed to sell Mr. Tajudin's stake in Naluri to a little-known company called Valiant Entity. Local newspapers have linked Valiant to Mr. Tajudin, but Danaharta said it had no evidence of a connection. Either way, when Valiant failed to provide Danaharta with a required letter of credit for the purchase by a Dec. 17 deadline, Danaharta called off the sale and appointed special administrators for Naluri from KPMG.

Taking over the management of Naluri is an extraordinary move: the agency usually takes over only deeply indebted companies that it deems beyond restructuring. Naluri has no debts. But Mr. Tajudin remains Naluri's chairman and largest shareholder. In August, Naluri proposed buying back roughly 830 million ringgit in stock from its shareholders.

Let's clear something.

There was no "purge by Prime Minister Mahathir Mohamad of the entrepreneurs he once relied on as nation builders." This we have confirmed with a close source.

If anything that Dr Mahathir was unhappy was the open declaration by Tajuddin that he was a Government nominees. Back when Tajuddin was "given" MAS, he said he was "glad" to the press.

And there was no such plan to replace the Tajuddins and the Halim Saads to promote "a group of technocrats, like those who run Danaharta, to overhaul corporate Malaysia."

It was all a Nor Yakcop game.

The Government had established Khazanah Nasional Berhad as the vehicle to take up allocated IPO Bumiputera shares.

Nor Yakcop was kept in Government after advising Dr Mahathir on the Selective Currency Control in the capacity as Economic Adviser. He was given a portfolio to take charge of Danaharta and be Chairman of Khazanah.

That should clear any claim that Dr Mahathir brought in Nor Yakcop into the cabinet and become a menace till today.

When he was Adviser, he was scheming behind Dr Mahathir's back with Pak Lah (Khairy included), and Kalimullah to make Khazanah a new vehicle to emulate Temasik Holdings. To do that, they need to acquire assets other than those already with Minister of Finance Inc.

Tajuddin and Halim became a victim.

Naluri was takenover eventually by Atlan Berhad group with Dato K being part of it. That explains his name is in the list Tajuddin's countersuit.

Tajuddin's Celcom share was sold away by Danaharta. Given the infrastruture and lead Celcom had, Tajuddin was shortchanged just like Halim.

Celcom shares was sold by Danaharta to Telekom, a Khazanah controlled company at around RM2.30 per share. One source claimed the Star report then that Tajuddin had a two digit price offer from abroad was true.

Khazanah has since grew bigger and bigger, but what has happened to it? It's financial position remains a mystery.

Under the helm of Tan Sri Azman Mokhtar, who is another of Nor Yakcop's running dog, Khazanah's performance is a big mystery and it's direction is aimless.

At one time, it was buying up asset and making claim it was nurturing and turning around companies. Except for Proton under the leadership of Dato Syed Zainal, Azman has yet to turnaround UEM and MAS.

What happened to MAS?

Since Azman and his Binafikir's Wide Unbundling of Asset (WAU) excercise involving RM5 billion worth of asset in financial year 2003, MAS faced a major loss of more than RM1.2 billion in financial year 2005.

They then brought in Dato Idris Jala, the man Nor Yakcop dubbed as the best money can buy CEO. MAS made a profit of RM840 million in 2007 but by selling off assets.

Since then it's profitability remain a yo-yo dependent on world jet fuel prices, because Idris timed his hedging wrongly until year 2011. Yet Tajuddin was being accused for loses from 1998 to 2001 arising from the ringgit drop during the financial crisis.

Operating profit is still a myth despite MAS showing profit. Is the profit a myth also?

The reason MAS continue to face difficulty lies with privately owned and majority held by foreigners airline, Air Asia.

Air Asia were taking MAS profitable routes locally and abroad. They had special status over MAS without the need to perform national services.

National services is something all that was dubbed as crony had to perform.

Under the WAU scheme, all MAS assets was taken over by Penerbangan Malaysia Berhad (PMB), as the leasing company which leases it back to MAS. It is basically a sell and leaseback exercise but on a bigger scale.

PMB is placed under Khazanah Nasional. What is the financial performance of PMB? If PMB and MAS were to be consolidated, what will be the consolidated profit and loss?

Only then will we know whether MAS did better than Tajuddin, the one being accused as corrupt and a shroud of conspiracy is being created as to allegedly cover him up by Attorney General, Police, ACA (now MACC) and who elses.

In the meanwhile, Nor Yakcop is still at large. His boys are still comfortably socialising with Kalimullah.

Khazanah is not getting any better.

All their ventures under the RM1 billion food fund failed to prove consultants and green boys of Khazanah can't developed and managed businesses.

Khazanah were made to look like fool to be greenmailed by two Indian brothers to buy a non-control stake in Parkway.

Their executives' KPI are to bring in deals and it doesn't matter if it bomb out later.

Khazanah must be bombing out everywhere. They are now on a selling off assets phase under the excuse liquidating not related investment. So much for so-called professionals and product of illustrious Universities.

Aren't they supposed to keep it for the Bumiputeras as a "trust" organisation?

No wonder they ignore calls by Bumiputera NGOs to defend play a role for Bumiputera agenda. The irony is Abdullah's administration had Malay Agenda as slogan.

Actually, they do not care.

Under another of Nor Yakcop's boy, Tan Sri Azman yahya, Danaharta never care to nurture ailing Bumiputera companies during the crisis.

Chinese owned companies were given much leeway but not Bumiputera companies. Azman Yahya was merciless with them.

The market talk among bankers then was that Azman Yahya was squeezing the desperate businessmen and taking the bargain buy for himself for a quick resell. Expectedly, most of the companies squeezed by Azman Yahya are Bumis.

Nor Yakcop is also continuing his losing streak.

He had cause a big hole in Bank Negara because of his foreign exchange losses which is said to be in the RM30 billion.

The true picture of Khazanah financial situation is not determined. By the time, Najib couldn't contain and had to divulge Khazanah's financial situation (with PMB included), Nor Yakcop should get a place in the Guiness Book of World record for the biggest loser of all time.

There have been endless talk that Nor Yakcop is in the must leave list in the next Cabinet reshuffle. But why is he still being given task and placing his people in agencies like EPF, Talent Corporation and Equinas?

So the fifth reason, why is the likes of Raja Petra, Din Merican, Tan Sri Robert Phang, Tan Sri Hadenan Jalil, and others are going for the ghost of the past than the bigger and more reckless ghost of today?

It must be beyond just about some businessman allegedly siphoning money or committing corrupt act. For politically inclined Raja Petra and Din Merican, there must be a bigger agenda at work!

On the 28th of April 2009, the Securities Commission charged the engagement partner of Roger Yue, Tan & Associates for abetting a listed company in submitting false information (inflated earnings) to Bursa Malaysia.